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Quality and Cost Adjustments May Hit Your Bottom Line in 2017

Written on November 15, 2016

Although the most talked about topic in healthcare in the last few months has been MACRA, another topic is starting to gain much attention—the Value Based Modifier (VBM). The VBM went into effect in 2014 to affect payment in 2016 for practices with 10 or more providers. Eligible professionals are classified as physicians, mid-level providers and certain therapists. Prior to 2014, a group’s only adjustments related to a lack of PQRS participation. It is important to understand the Value Based Modifier is calculated at the tax identification level. Even if a group reports quality as individuals, they will be identified as a group by the number of eligible providers associated with their tax identification number through Medicare enrollment with PECOS.

The Center for Medicare and Medicaid Services (CMS) reports the results of quality and cost through Quality and Resource Use Reports (QRURs). These reports are released in April as a mid-year QRUR and September for the final year QRUR. The QRUR report shows PQRS reported quality information along with CMS calculated outcomes and cost measures to calculate two composite scores: a quality composite and a cost composite. CMS classifies each score into high, average or low based on whether the score is at least one standard deviation above/below the national mean score. This process identifies statistically significant outliers. The outliers are then assigned to the respective quality and cost tier. The CMS quality and cost tiering analysis determines whether the score will earn the medical practice a bonus, penalty or no adjustment to their reimbursement based on performance in these categories.

Most of us understand the quality portion of the VBM, but there are many questions related to cost analysis. The cost portion of the VBM is based on six cost measures to calculate your TIN’s Cost Composite score.

Per Capita Costs for All Attributed Beneficiaries

Per Capita Costs for Beneficiaries with Diabetes

Per Capita Costs for Beneficiaries with COPD

Per Capita Costs for Beneficiaries with Coronary Artery Disease

Per Capita Costs for Beneficiaries with Heart Failure

Medicare Spending per Beneficiary (even providers not in your TIN)

In 2017, all practices will be impacted by the VBM, even solo physicians. We have been afforded flexibility in 2017 for the implementation of MACRA, but since the new Merit Based Incentive Program has a portion that represents quality reporting, it is important for quality reporting to be improved each year. To access your QRUR reports, you must have an account with Enterprise Identity Management to select an administrator. We encourage administrators to obtain the 2015 QRUR reports immediately to assess performance. All practices have until November 30, 2016 to dispute results of the 2015 QRUR report.

While some practices have reported no adjustments after reviewing their QRUR reports, others have reported negative adjustments. Specialty practices with a payer mix of more than 40 percent Medicare can lose large amounts of reimbursement with a 2 percent negative adjustment.

Quality/Cost

Low Cost

Average Cost

High Cost

High Quality

+ 4%

+2%

No payment change

Average Quality

+2%

No payment change

-2%

Low Quality

No payment change

-2%

-4%

The better performing groups have aligned themselves with a progressive EHR and a practice management system that allows them to track performance by provider. Many of these systems are registered to allow direct reporting of quality to CMS via the EHR web reporting mechanism. Many better performing groups have joined Qualified Clinical Data Registries to increase the number of domains and gain support from other practices in their specialty. Claims-based reporting has proved to be problematic and is not considered the best option for reporting quality data. It is best for large groups to register and report as a group as opposed to individual reporting in most cases. Monitoring individual performance can be difficult, and a single provider’s lack of performance could affect the entire group. Group registration will open early in 2017 and last through June 30. Consider this option if your practice has between 2-99 providers.

We have discussed the 2015 QRUR reports and how they will affect 2017 reimbursement, however, 2016 is almost over. The 2016 performance year affects the 2018 reimbursement for all providers. Be sure to assess your performance and make changes now to improve your scores. Contact your academy or governing board for your specialty to assure you are using the resources available to you. Create a team or committee to focus on VBM workflow; improvement in reporting involves physicians, clinical operations, coders, and a close relationship with your EHR vendor.

Tammie W., CMPE, CPC

Tammie Lunceford serves Warren Averett as a dental and healthcare consultant. She obtained her Bachelor of Science in Health Administration from UAB in 1995. Tammie is a Certified Professional Coder, CPC and registered with the American Society of Pathology as a medical laboratory technician, collectively bringing her clinical and administrative experience to more than 25 years. She has served in an Administrator or Director role in multiple specialties, with health systems, private practice, and medical management organizations. Tammie serves medical and dental practices by evaluating scheduling, patient flow, operational efficiencies, revenue cycle management, and EMR selection process and planning. In addition, she is knowledgeable with evaluating staff structure and compensation.